A legendary CEO, Herb Kelleher of Southwest Airlines, passed away last week. Many articles have already been written memorializing him, including this one by Bill Taylor in the Harvard Business Review and this one by our friend Mark Graban, but I’d like to reinforce a couple attributes that are important to me.

The key to Kelleher’s success was his focus on people – customers, employees, and suppliers. He epitomized the “respect for people” (or “human nature“) pillar of lean and demonstrated how effective and powerful humble, authentic, and empathetic leadership can be. Bill writes,

As I take stock of his life and legacy, what strikes me is how much all of us can learn from what he created and how he led—that you can create vast economic value based on genuine and generous human values, why what you hope to achieve in the marketplace must be reflected in what you build in the workplace, how in an age of disruption and transformation, simplicity and consistency matter most.

Southwest’s mission was to “democratize the skies” by making it easy and affordable for everyone to fly. Kelleher and Southwest succeeded, and to this day reinforces this mission by eschewing tactics such as charging for carry on baggage. Kelleher viewed corporate rules as guideposts, but not walls, and encouraged his employees to “serve the customer regardless of what the rules were.”

The focus on people was also internal, with Southwest’s “8 Freedoms” that created an incredible corporate culture, which includes the “freedom to innovate,” the “freedom to achieve financial security,” and the “freedom to learn and grow.”

Kelleher viewed business as an ecosystem where everyone could achieve success if they worked together, and there are many stories about how he actually helped competitors. Andrew Wagner described this well in a reply to Mark’s article:

There was an MIT Leaders for Manufacturing dissertation written about ten years ago by Ted Piepenbrock that studied “enterprise architectures.” It outlined two different approaches, “modular”, in which the company, shareholders, employees, suppliers, and customers were all interchangeable parts, and “integral” in which the opposite was true: companies, their shareholders, employees, suppliers, and customers were interlinked, committed, and interdependent on each others success.

Two companies most epitomized the “integral” enterprise: Toyota and Southwest Airlines.

I would add “competitors” to that list as, similar to Southwest, Toyota has partnered with competitors such as GM (NUMMI) in an attempt to create mutual value. Unfortunately that mindset is so unusual that those partnerships aren’t often successful.

Finally, a third characteristic that led to Southwest’s success is a focus on simplicity and consistency – perhaps an anathema to the pressure most organizations feel today to rapidly innovate. A single type of plane to reduce maintenance costs and increase interchangeability, a simple boarding method rather than the ten or more zones of larger carriers, and a point-to-point network instead of hub-and-spoke.

Take some time to reflect on Herb Kelleher. How can we learn and improve from his drive to build value via a focus on people? How can we grow customer value while also being authentic, and empathetic to the needs of our team? How can we look outside of our organization, even at our competitors, and help them succeed so we all succeed? And where can we grow by embracing simplicity and consistency?

It seems that the more places I see and experience, the bigger I realize the world to be. The more I become aware of, the more I realize how relatively little I know of it, how many places I have still to go, how much more there is to learn. Maybe that’s enlightenment enough – to know that there is no final resting place of the mind, no moment of smug clarity. Perhaps wisdom, at least for me, means realizing how small I am, and unwise, and how far I have yet to go.– Anthony Bourdain

Forty-five years ago, my parents uprooted our family from a comfortable existence in west Texas and moved to Peru, which at the time was in the middle of a military dictatorship. This was before the internet and Amazon, news and our usual comforts were hard to come by, and the heavily-armed police on every corner were a little disturbing. My sister and I weren’t exactly thrilled about leaving our friends and first world problems, nor did we appreciate seven years of visiting probably every nook and cranny in Latin America.

Now I am very, very thankful. The experience gave me a perspective of the world that has proven invaluable in life and my career, as well as a wanderlust that has led me to visit over 65 countries. I always encourage people to go overseas with their kids, even if just for a visit, as the experience is truly life-changing.

There were a lot of Americans in Peru at the time, thanks to the oil and copper industries, and we attended a large American school. I was on the swim team, which was often like a mini Olympics – we competed against the British, Japanese, and German schools. But we didn’t just hobnob with expats – my parents insisted that we spend a lot of time with typical Peruvians, at all levels of the socioeconomic scale. We’d take long trips on back roads through small villages, spend a Sunday afternoon tramping through a slum trying to find a furniture woodworker, and go to parties at the homes of dad’s local staff.

My wife and I have carried that concept with us when we travel – domestic and overseas. Instead of spending weeks planning how we’re going to hit all the tourist hot spots, we’ll often do a quick scan of a guide book on the plane over and perhaps a quick traditional tour the first day. Then we spend the rest of our time off the beaten path, trying to learn how typical people live. Yes, we miss a lot of museums, but I think we gain a more real understanding of the locale.

Some memories are truly special. We’ll always remember spending Christmas at an orphanage in Panama, sipping tea with villagers in the high mountains of Bhutan, touching old bullet holes in the walls of a new yoga studio in Bosnia-Herzegovina, visiting a hospital in Tanzania (that happens to apply lean principles – see the impromptu video series I filmed for Gemba Academy!), having a beer while listening to a concert in a small beach town in Cuba, and contemplating the incredible violence of years past while having a sunset drink at a café on the Mekong River in Laos.

The experiences change you. They are truly a gemba, as value is created there both for the local people and for us in terms of accurate perspectives on the world. Reality is often far different from what many people think it is, especially in the U.S. where so few people travel outside of the country, let alone continent. Sort of like running a factory from a conference room instead of visiting the shop floor.

The walls of our home are filled with photos of our travels, almost all with people. The old man in the photo above, taken in Dhulikhel outside of Kathmandu in Nepal, still haunts me. Take a moment and really look at the leathered skin, the tired eyes, and the gnarled hands. You can almost feel the extreme hardship he’s endured. When I face a struggle I remember people like him and realize, again, how blessed I am to have the pure luck to be born where I was.

The passing of Anthony Bourdain in early June impacted me more than the death of any other celebrity, perhaps because I don’t really watch mindless TV or keep up with celebrities. Bourdain was an exception. We shared his love of food and travel, and especially how he went out of his way to connect with the local culture.

Over eleven seasons his Parts Unknown series visited 100 locations. Oftentimes we had already been where he went and could relive the experience, but several times he added new places to our wanderlist.

Lots has been written on how Bourdain struggled with his own demons. Maybe that’s why Bourdain was able to connect with people, creating real understanding, empathy, and compassion. And that’s why my wife and I connected with Bourdain’s show. In his travels he found what we also seek when we explore the world: a true understanding of the lives of people.

We live in strange, dark times that often seem bereft of fellow-feeling. For many (me included), Bourdain was an ideal of how empathy and curiosity could be wielded against the world’s ignorance and fearfulness. He felt deeply. Now he’s gone, and we’re still here. We need to be people who feel things deeply. We need to interrogate our assumptions about the world and the strangers in it. We need to try to know each other.

Rest in peace, Anthony. Thanks for inspiring us to discover and connect with real people.

As I was researching the remarkable similarities between Lean and Zen for my book, The Simple Leader, one of the most interesting – and meaningful – was the concept of the beginner’s mind.

Taiichi Ohno said, “Observe… without preconceptions and with a blank mind.”

Zen master Shunryu Suzuki similarly said, “In the beginner’s mind there are many possibilities, in the expert’s mind there are few.”

One of the core concepts of Zen is shoshin, or “beginner’s mind.” This is a perspective that is free of preconceived ideas and opinions, and is open to new thought. We know how some Lean concepts can be counterintuitive. Embracing shoshin requires “unlearning” what you thought you already knew—in effect, creating a beginner’s mind.

Yoda, back in one of the original (and, ahem, good) Star Wars movies recognized this and told Luke Skywalker “You must unlearn what you have learned.“

As we become older and supposedly wiser, creating a beginner’s mind can become increasingly difficult. It becomes even more so when an entire team or organization needs to unlearn and develop a beginner’s perspective. So how do you revert to a beginner’s mind?

Begin by focusing on questions, not answers. When observing a process, especially one you’ve seen many times, try to avoid jumping ahead to conclusions. Take one step (or, as Ohno would emphasize, one question) at a time. Similarly, be aware that what seems like common sense may not be. Avoid using the word “should” as it implies a predetermined or expected outcome. Be careful with experience. What you already know should be an input, not a perspective. Be comfortable with saying “I don’t know”—it shows a desire to learn and is a component of humility.

Being biased is a result of not having a beginner’s mind. The most common and well-known bias is confirmation bias. This is our desire to believe what we want to believe, to the extent that we consciously or subconsciously distort or interpret information to fit our preconceptions. We can also seek out sources of information that align with our biases, while ignoring non-confirming data.

You can see an example of confirmation bias in the politics of the United States – and apparently in the United Kingdom as well. It is the reason the two major parties in the U.S. are moving away from the center and more toward the extremes. Even though the number of information sources has exploded over the last couple decades, people on the right of the spectrum consume news geared toward them, because they feel it is correct. In other words, it fits their biases. The same happens on the left. This has occurred to such an extent that heroes of each party—Ronald Reagan and John F. Kennedy, for example—probably wouldn’t be welcome in their respective parties today.

A second form of bias is loss aversion. Researchers such as psychologists Daniel Kahneman and Amos Tversky have found that we’re twice as likely to try to avoid a loss than go after a gain. In effect, we are risk averse, which may be great for our survival as a species, but it hinders us as we try to create organizational change and improvement.

A third form of bias is conformity bias, also known as groupthink (e.g., “When in Rome…”). By nature, most of us don’t like to stand out in a crowd and will be willing to agree with a group, even if we know the information is incorrect.

A fourth type is survivorship bias, where we focus on the tiny fraction of people that are successful, ignoring the far greater numbers that have failed. An example of this is our fascination with and attraction to get-rich-quick gurus. We also look at highly successful people like Steve Jobs and Bill Gates, and think that could be us. We then try to model ourselves after them. We find it easy to ignore, or not even understand, that every path is unique and what works for one person may not for another, for a multitude of reasons.

Finally—and this one is very common in the business world—is anchoring, or first impression bias. This form of bias occurs because we subconsciously give the first piece of information we receive on a topic more relevance and weight than follow-up information. This is why public relations companies find it very important to get their story out first, and why it is so difficult to change minds after the fact—even if the subsequent information is more accurate.

Once we know that we’re susceptible to these biases, what can we do? The most important thing to do is to be mindful and present. Observe and ask validating questions. Why do you think this way? What are the arguments against your opinion? Review the forms of bias and honestly try to determine if they might be in play.

Taking steps to neutralize your biases will help you make smarter, more rational decisions. Observe like a beginner. Find your inner Yoda… or Suzuki or Ohno.

Few people realize how employee policy manuals, usually given to you on your first day and then mostly forgotten, shape an organization’s culture and thereby its fundamental performance.

To give you a reference point, one company I worked for had a forty-plus-page employee manual that started every section with “COMPLIANCE IS ESSENTIAL” highlighted in bold, with “required to conform” sprinkled liberally throughout the document. The manual ended with a meaty discussion of the punitive measures that would happen if someone deviated from the policies. And this was a company considered very innovative in many ways!

The other extreme is Zaarly, a San Francisco-based startup. Its employee handbook, posted online for even non-employees to see, talks directly about culture. The “Rules for Work” section begins with “We don’t have these.” And in a style prevalent throughout the document, it adds that “if you want to coast, we recommend you apply for a job at Craigslist.” Included are some good thoughts on teams, work, and communication, but no rules.

Another example is the famous Netflix “business culture” PowerPoint that serves as the company’s employee handbook. Similar to Zaarly’s handbook, it talks a lot about culture and a lack of rules. There is no vacation policy, and the travel and expense policy is literally five words: “Act in Netflix’s best interests.” That’s it. Unlike Zaarly, Netflix does say some rules are necessary, such as: “Absolutely no harassment of any kind.” In this case, I completely agree, especially on that item. Some topics relating to privacy, security, and regulatory requirements are important enough that they need to be spelled out in no uncertain terms.

Netflix believes high-performance people should be free to make decisions, and those decisions need to be grounded in context. Mission, vision, and value statements do not create context. To demonstrate this, Netflix’s presentation provides the example of how Enron’s value statement included “integrity.” Real company values are shown by who gets rewarded for embodying desired behaviors and skills. The document goes on to describe the primary Netflix values and the associated behaviors.

At Netflix, flexibility is more important over the long term than efficiency. To inhibit the chaos that too much flexibility in a large organization can create, the company hires (and keeps) only high-performance people. High-performance people make great decisions, so building a staff of them is better than having people who are good at following lists of rules. Later on in the Netflix document, there is a good discussion that encourages managing with context instead of trying to control people. That way, when something fails, managers look to figure out what went wrong with the process rather than with the people.

One part of the Netflix document that gave me pause was an insinuation that defined processes (such as standard work) are all bad. But doing standard work doesn’t necessarily mean the employee has zero flexibility. As those of us in the Lean world know, standard work is the foundation for kaizen. Once an employee deeply understands a process, he or she can (and is expected to) come up with ways to improve it and then share it, which is called yokoten.

In January 2014, Brad Power posted a piece in Harvard Business Review titled Drive Performance by Focusing on Routine Decisions that hits at a similar concept. Instead of creating rule-bound defined processes, companies should focus on improving the quality of the decisions made by managers. Power illustrates the idea with an example those of us in the manufacturing world have all experienced: the maelstrom of materials control. He describes how the materials department of an electronics distributor was able to improve operations by better training managers to make key decisions about inventory. The goal of the training was to get managers to focus less on perfecting company processes (the “box and arrows” of a flowchart) and more on understanding what objectives the processes were supporting in the first place. When managers were able to understand how the processes affected actual business performance, they were able to make decisions (the “diamonds and arrows”) that improved performance:

These two stories highlight the advantages of focusing process improvement on “diamonds and arrows” — i.e., making better decisions. Project leaders who focus exclusively on the “boxes and arrows”of workflow action improvement will often find themselves caught up fixing yesterday’s operations and systems issues. Workers who participate in these interviews and workshops tend to fixate on the pain points they want fixed. This focus on immediate problems can actually distract the project team from the real goals of the business and the decisions that will help achieve them.

Are your rules improving the boxes (company processes) but harming the diamonds (managers’ decision-making)? How is that rigidity affecting your long-term performance? Do you have a team of high-performance people that you can trust to deal with the diamonds in a flexible, agile way? And how do your under-lying documents, even down to the employee handbook, support or impede that? These are questions to consider as you look to improve your company’s performance.

I will take time to be alone today. I will take time to be quiet. In this silence I will listen… and I will hear my answers. – Ruth Fishel

One of my great pleasures is going for a walk on the beach a couple blocks from my house. Contrary to the popular perception of California as a land of crazies, crowds, and freeways, Morro Bay is a small working fishing village with 10,000 residents and one stop light, at the southern end of Big Sur and the prettiest drive in the world. There are over 200 wineries within 30 miles. (end tourism bureau advertisement)

And, of course, our six mile long beach with the remnant of a long-dead (hopefully) volcano at one end. Deserted, even in high season.

A long walk in such a beautiful spot creates a connection between nature, body, mind, and God. A connection often never made while buried in the chaos of normal life. It is a time for reflection and recentering.

How am I doing, mentally, spiritually, and physically? Am I on track to achieve my personal and professional goals? What countermeasures do I need to put in place? What new opportunities can I create? What activities – and thoughts – should I stop?

Regularly asking, and answering, those questions is critical for effective professional and personal leadership.

The walk is also an exercise in observation. I always try to find something I haven’t noticed before. Whether it has always been there or is a result of the ever-changing seascape from tides or storms. This exercise has helped me become more observant in other situations.

Zen has a concept called seijaku – stillness, quietude, and solitude. It is in a state of seijaku when we become very self-aware and can harness the essence of creative energy.

Solitude gives birth to the original in us, to beauty, unfamiliar and perilous…. – Thomas Mann

My walks, perhaps kinhin, on our deserted beach every day or two has that affect. It’s when I connect the dots and come up with new ideas – many admittedly crazy, some not. I find it sad, and perhaps disturbing, that more and more people seem to find it difficult to enjoy and embrace the power of solitude, of being alone. Many of the younger generations, raised in a world of artificial hyperstimulation, seem incapable of appreciating quiet solitude.

In a business world of teams we may persuade ourselves that we are at our most wonderful in a group, drawing on its power and influence, but as Michel de Montaigne insisted, ‘The only true freedom comes in solitude.’

The sources of music, painting — and writing itself — are solitary. The presence of others can be a joy, but also a problem. Other people may offer a solution to our problems, but it is usually a solution to their problems, and if it helps us it is usually by luck.

The simple reason we don’t find solutions this way is because we spend very little time with ourselves, and are discouraged from doing so in the modern world.

People go to the ends of the earth to see the great mountains, and wonder at them, and to explore the great rivers, and wonder about them. But the greatest wonder of them all — themselves — they never look at or wonder at. – Saint Augustine.

A couple weeks ago a few of us at Gemba Academy were discussing books we’ve found interesting. Jon Miller suggested Edgar Schein’s Humble Inquiry: The Gentle Art of Asking Instead of Telling. Those of you who know Jon know he’s a bit of an intellectual powerhouse so, with a little trepidation that the book may not be appropriate for mental mortals like myself, I downloaded a copy.

I loved it. Schein describes three types of humility and four types of inquiry, focusing in on the power of inquiry based on here-and-now humility. This form of humility happens when we presume to be dependent on someone else because that someone has something we need – perhaps knowledge.

It struck me that, although Schein was intending to describe a relationship between two or more people, his concepts are also very appropriate for our discussions with ourselves – assuming we have them, of course.

Consider the following excerpt:

What we ask, how we ask it, where we ask it, and when we ask it all matter. But the essence of Humble Inquiry goes beyond just overt questioning. The kind of inquiry I am talking about derives from an attitude of interest and curiosity. It implies a desire to build a relationship that will lead to more open communication. It also implies that one makes oneself vulnerable and, thereby, arouses positive helping behavior in the other person.

Feelings of Here-and-now Humility are, for the most part, the basis of curiosity and interest. If I feel I have something to learn from you or want to hear from you some of your experiences or feelings because I care for you, or need something from you to accomplish a task, this makes me temporarily dependent and vulnerable. It is precisely my temporary subordination that creates psychological safety for you and, therefore, increases the chances that you will tell me what I need to know and help me get the job done.

Creating a humble, vulnerable relationship with yourself opens you up to being able to inquire, discover, reflect, and perhaps create change. Accepting yourself for who you are creates peace.

Effective personal leadership, requiring conscious individual reflection, is critical for effective professional leadership. Take some time, alone and perhaps in the grandeur of nature, to humbly ask yourself some tough questions. You might be surprised at the response.

Wal-Mart is famous for keeping costs down, including employee-related costs. In Joplin, the company is testing a new approach: investing in workers through higher wages and training, on the theory that this will pay off all around—for customers, the company and employees.

Yes, at just one of their 4500 stores, Wal-Mart has discovered skills training. If it works they plan to roll out this innovative program to the other stores.

That isn’t a story from 1975 or even 1995. It’s from this past week. September, 2015. Good for them, though, even if they did take a few decades to realize the potential value of people. A concept that many other companies in many other industries have leveraged to create competitive advantage for a long time.

Pretty much every organization has a mission statement, often gathering dust on the wall in a corner of a conference room, that says “our employees are our most valuable asset.” Really? How is that demonstrated?

I bet Whirlpool had a statement like that, as they were laying off thousands of highly experienced people at their Fort Smith plant to chase “cheap” labor to a new facility filled with new inexperienced people in Ramos Arizpe, Mexico, while hiring at their nearby Clyde plant, and then only a couple years later they started looking for people to refill a plant they had closed. You can’t make that stuff up.

But that’s what happens when you run a company based on traditional accounting methods, where labor is purely a cost and there is no offsetting P&L or balance sheet line for the value of people. There’s a benefit to reducing cost, there is no balancing benefit to preserving the value of brains.

It takes a strong manager to realize that those brains are creating value that more than offsets their cost, even if it isn’t directly shown on the financial statements, and to buck the questions of their bosses and financial folks. It takes an even stronger and more capable leader to invest in, develop, and mentor those brains to really tap into the potential value. Organizations that have such leaders understand the problems with traditional accounting. As a side note, you can learn more about those problems, and get to know some of those leading organizations, at the Lean Accounting Summit next month.

Truly empowered high-performing people can have an impact far beyond improvements in productivity and quality. Consider your perception of the Chipotle brand after reading this article about a fatal accident that happened in front of one of their restaurants.

She [Chipotle shift leader] appeared to be in her early 20s – not much older then her direct reports or the victim of the accident. Yet, she acted with the compassion and appropriateness of a far older leader.

The next day, I called the Chipotle restaurant to offer my appreciation to the store’s manager. I told the leader how supportive, flexible, and respectful the Chipotle crew was to all in attendance.

As our phone conversation drew to a close, I said, “I know that our presence last night was not what you expected. We no doubt hurt your business.”

Before I finished my thought, the store manager responded, “There are a lot more important things in life than making our numbers last night. I’m just glad we were able to be there.”

Great people, led by great leaders, create great companies. As Richard Branson says, “Clients do not come first. Employees come first. If you take care of and develop your employees, they will take care of the clients.”

I was thinking about a sandwich for lunch, but I think I’ll head down to Chipotle for a veggie burrito.